Forex: yen spikes as stocks slumps on concern over global economic forecast

September 8, 2010 - 12:41am

In early Asian session Wednesday, the Japanese unit gained ground across the board as Asian stocks fell on persistent concern about the global economic outlook prompted traders to seek the safe-haven Japanese currency. The yen thus jumped to a fresh 15-year high against the dollar, 8-day high against the franc, 15-day high against the euro and a 1-week high against the Australian, New Zealand and Canadian dollars.

In equity front, Asian stock markets are trading weak today with the overnight negative close on Wall Street amid renewed concerns about the financial health of European banks, hurting sentiment to a notable extent. Economic reports from the Asian region too are not any significantly encouraging.

Thus far in Asia, Japan's Nikkei 225 index fell 2.4%, Hong Kong's Hang Seng slipped 1.4%, China's Shangai composite index dropped 0.5%, New Zealand's NZX 50 index lost 0.4%, South Korea's Kospi declined 0.9%, Taiwan's main index plunged 0.6%. Australia's S&P 200 index and the All Ordinaries index slumped 0.7% each.

The yen thus rose versus the US dollar during Asian session on Wednesday. USD/JPY rally that closed Tuesday's trading at 83.84 is now worth 83.39. This set a fresh 15-year high for the Japanese currency. The yen gained more than 10% against the dollar thus far this year.

During Asian deals on Wednesday, the yen climbed against the euro. As of now, the yen is trading at a 15-day high of 105.81 against the euro with 105.4 seen as the next upside target level. EUR/JPY pair closed yesterday's trading at 106.31.

The yen strengthened against the Swiss franc in Asian deals on Wednesday. The yen is currently trading at an 8-day high of 82.55 against the franc, compared to Tuesday's close of 82.92. The next upside target level for the Japanese currency is seen at 80.4.

After a brief slide, the yen jumped against the pound in Asian deals on Wednesday. At present, the yen is worth 128.20 per pound. If the yen gains further, it may likely target the 127.9 level. GBP/JPY pair was worth 128.78 at yesterday's close.

In Asian deals on Wednesday, the yen soared to a 1-week high of 59.70 against the NZ dollar, 75.96 against the Australian dollar and 79.53 against the Canadian dollar. The next upside target level for the yen is seen at 58.6 against the kiwi, 74.5 against the aussie and 78.6 against the loonie. The yen closed yesterday's trading at 60.23 against the kiwi, 76.37 against the aussie and 80.02 against the loonie.